Prof. Dr. Gaye Gencer: Do Not Be Misled by Social Media or High Returns When Choosing Funds
Prof. Dr. Gaye Gencer: Do Not Be Misled by Social Media or High Returns When Choosing Funds
Investors should not focus solely on past returns when choosing investment funds, Prof. Dr. Gaye Gencer said. “Investors focus primarily on returns when choosing a fund. Investors should assess returns and risk together. You should not assume that everything said on social media is true. You should follow statements from official, reliable sources and verify the information you receive.”
Gencer, a faculty member in the Department of Business Administration at Yeditepe University’s Business School, discussed investment funds and the importance of financial literacy at a Financial Literacy Seminar organized for the university’s preparatory school.
‘High returns should not be the sole focus’
Gencer said the prospect of high returns alone is not a sufficient basis for an investment decision. Investors need to consider how the securities in a fund’s portfolio might respond, particularly in adverse market conditions. “Investing based on high returns without considering risk is not a sound approach. You need to look at how the securities held by the fund might respond, especially in adverse market conditions,” Gencer said.
Gencer noted that past performance can offer valuable insights but should not be the sole basis for an investment decision. “How a portfolio has performed in the past, particularly during crises or periods of greater instability, can give us clues about what might happen in the future. However, it is far more important to know which securities the portfolio holds and to be able to anticipate how they will respond to market turbulence,” Gencer said.
‘Macroeconomic conditions must also be considered’
Gencer said investors should also keep track of macroeconomic developments when choosing a fund. Interest rates, central bank decisions, commodity prices, and geopolitical developments can affect investment performance, Gencer noted.
“Global commodity price movements and interest rates matter. So do the ways central banks’ rate decisions will affect the markets for stocks, bills, and bonds, and how geopolitical risks will evolve. We need to pay attention to all of these factors,” Gencer said.
Gencer also emphasized the importance of accurate information for investors and the role of regulation in investment decisions. Alongside a fund’s overall risk level, investors need to assess the securities in its portfolio and the risks associated with each instrument, Gencer said.
‘Not everything on social media should be taken as fact’
Gencer also addressed social media’s influence on investment decisions, saying investors should choose their information sources carefully. “The accounts and people you follow matter a great deal. You need to verify the information you obtain. You should not assume that everything said on social media is true. You should follow statements from official, reliable sources and verify the information you receive.”
‘Financial literacy is very important’
Gencer said financial literacy levels in Türkiye need to improve and that greater financial knowledge would help people make more informed investment decisions. “Unfortunately, the statistics show that financial literacy in Türkiye is very low. It is even lower among women. Improving financial literacy is extremely important in helping people make sounder, more rational investment decisions,” Gencer said.
Urging young people to improve their financial literacy, Gencer pointed to university finance courses, as well as online training and certificate programs offered by the Financial Literacy and Inclusion Association (FODER) and through the Presidency’s financial literacy platform.
Financial literacy course at Yeditepe
Gencer also discussed an ongoing project to improve financial literacy through collaboration between Yeditepe University, the British Council, and Nottingham Trent University in England.
As part of the project, Yeditepe University introduced a financial literacy course this year as a Rectorate elective, Gencer said. “Students in departments other than Business Administration and International Finance will take this course to improve their financial literacy. We hope it will help students graduate with stronger financial literacy skills.”